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Though the mistakes people make in handling their credit is well documented no one argue that good credit is vital. A good credit score is a stepping stone to many advantages in wealth creation. Here are a few credit basics to improving or maintaining your score.

Step 1: Go directly to the source to see what exactly your credit is. You will want to pull all three credit reports from www.equifax.com, www.transunion.com, and www.experian.com. These are the bureaus that your creditors report to and you will need to investigate all three to determine what incorrect and derogatory items you have.

Order your reports AND scores directly from the bureaus. Don?t waste your time dealing with one of those companies offering you a free report. What you will find is that the reports are NOT free and what they are after is setting you up on a monthly pay plan to monitor your credit.

Once you receive your reports then take note of each one separately. All three bureaus report based on different matrices and will reflect different information. Note what items are derogatory. A derogatory item is any item that is listed as a public record or that has a late payment.

Step 2: Dispute. When you begin the dispute process always write your dispute letters in your own words. Do not use the forms provided by the bureaus. Disputes are handled by real people and should be treated as such. Employees at credit bureaus are trained to sniff out credit repair companies and false disputes so you are always better off putting the dispute into your own letter in your own words.

Do this with all inaccurate information on your report. It is not very hard to do and can raise your score very quickly. If the credit account in dispute is yours, and it is currently an open account, then you should contact that creditor directly. Many times a creditor will remove derogatory items at the request of a current client. In some cases putting pressure on the creditor by threatening to close your account will get them act quickly on your behalf.

Step 3: Wait it out or pay it off. Something to be aware of is that almost all derogatory credit “falls off” a report after 7 years. If you have credit issues that are old you may be better off waiting for those to come off by themselves rather than investigating them. The 7 year waiting period is from the last activity on the account. I have seen credit situations that reactivated because a dispute was issued on an old item. If this happens and the item is found to be valid then your score will drop and the clock will reset for 7 more years.

You can see an immediate benefit to your score by adjusting the balances of your credit cards. A good rule of thumb is to never allow your cards to go over 50% of available balance and preferable 30%. Having one card at zero and another maxed out will cause a lower score than having each card at 30% of max. Transfer part of the balance onto that card with zero and balance your accounts.

Step 4: Be cautious in establishing new credit and especially don’t close old accounts. It’s important to know that one of the major contributing factors in your credit score is the length of time that credit has been established. Older accounts, even ones you’ve not used, will positively effect your score. Newer accounts will skew the average and lower your score.

By applying the strategies I’ve outlined here you can fix or maintain your credit. In some cases, working with a credit repair agency is worthwhile but before you do these simple steps can put you well on your way to excellent credit.